Below are summaries of the legislative and regulatory changes made to the Political Reform Act (Act) in 2015.The legislative provisions of AB 594 and SB 21 take effect January 1, 2016. Please note that two bills, AB 990 and AB 1544, are effective immediately. To view the full text of the bills, visit: http://leginfo.legislature.ca.gov/. To view the full text of FPPC regulations, visit here.
Committee qualification threshold: The recipient committee qualification threshold was raised from $1,000 to $2,000. (AB 594 (Gordon) – Chapter 364, Statutes 2015)
Supplemental preelection statements and supplemental independent expenditure reports: Forms 495 and 465 were eliminated because new reporting requirements had made them redundant. The extension of the 24-hour reporting for contributions and independent expenditures from 16 to 90 days before an election enacted in 2012 made these statements unnecessary. (AB 594 (Gordon) – Chapter 364, Statutes 2015)
90-day 24-hour reporting period: The 90-day 24-hour reporting period was amended to include the election date itself, in addition to the 90 days before the election. This makes the 90-day 24-hour reporting period for state and local committees consistent. (AB 594 (Gordon) –Chapter 364, Statutes 2015)
Preelection filing requirements: The requirements for candidates and committees to file two preelection campaign statements were clarified. For example, city major donors are no longer required to file preelection statements and only file semiannual statements like county and state major donors. Uniform timelines for the date of preelection filings were also enacted. (AB 594 (Gordon) – Chapter 364, Statutes 2015)
Ad disclosure: Campaign advertisement disclosure statements must be printed in no less than 14-point, bold, sans serif type font. An advertisement supporting or opposing a candidate that is paid for by an independent expenditure must include a disclosure statement with specific content. If the advertisement is mailed, the disclosure statement must be located within a quarter of an inch of the recipient’s name and address and be contained in a box that meets prescribed criteria for line width and has a contrasting color background to the rest of the mailer. (AB 990 (Bonilla) – Chapter 747, Statutes 2015, effective October 10, 2015)
Multipurpose organization reporting: Multipurpose organizations such as nonprofit organizations and federal or out-of-state PACs report their political spending in California under Section 84222. Regulation 18422, interpreting Section 84222, explains that a multipurpose organization that is disclosing its most recent contributors using a last in, first out (LIFO) accounting method must send a “major donor notice” to contributors who meet the thresholds in Section 84105 and Regulation 18427.1. Similarly, a multipurpose organization must send an expedited “nonprofit filer notice” if it identifies a donor that gave more than $50,000. The notices state that the donor could be required to file campaign statements. The amended regulation clarifies that the major donor notices and multi-layer reporting apply equally to federal PACs and out-of-state committees. To determine which donors would receive the notices, the federal PACs would refer to their federal reports and send notices to the most recent donors identified on that report prior to the date of the expenditure who gave at the required thresholds. Additionally, Section 84222 and Regulation 18422 supersede Regulation 18413, which was previously enacted to provide reporting requirements for certain eligible 501(c)(3) organizations making occasional independent expenditures.Top contributor disclosure: A state ballot measure committee or candidate independent expenditure committee that raises $1,000,000 or more submits a list of its top ten contributors to the FPPC for posting (Section 84223). When a state recipient committee is listed as a top 10 contributor and the state recipient committee has received contributions aggregating $50,000 or more, from a single source, during the current two-year election period, the names of the top two contributors must be listed. Regulation 18422.5 implements the change.
Made at the behest; independent versus coordinated expenditures: The Commission updated Regulation 18225.7 describing when a contribution or expenditure is “made at the behest of” or coordinated with a candidate or committee. An outside committee’s or person’s spending is presumed to be coordinated with a candidate, and not independent, in the following situations: (i) if the candidate and the outside group share common consultants over the course of the primary and general elections; (ii) if the candidate participates in fundraising for an outside committee that is primarily formed to support that candidate or oppose their opponent; (iii) if the outside group is established or run by former staffers of the candidate; and (iv) if the outside group is established or principally funded by family members of the candidate.
Form 700 Changes
Travel payments: If an individual receives a travel payment that is a reportable gift, he or she must disclose the travel destination on Schedule E of Form 700. This applies to travel taken on or after January 1, 2016. An individual who is filing a 2015 annual statement is not required to disclose the travel destination, but may do so. (SB 21 (Hill) - Chapter 757, Statutes 2015)
Behested payments: A payment made at the behest of an elected officer is exempt from the behested payments reporting requirement if the payment is made by a state, local, or federal government agency and is principally for legislative or governmental purposes. The payment is exempt from reporting requirements regardless of who received the payment. For example, a government agency could make the payment to another government agency, a nonprofit or a private third party and it would not have to be reported as a behested payment. (AB 1544 (Cooley) – Chapter 756, Statutes 2015, effective October 10, 2015)
Nonprofit organization travel payments: Nonprofit organizations that make travel payments of $5,000 or more for one elected state or local officeholder or $10,000 or more a year for elected state or local elected officeholders, and whose expenses for such travel payments total 1/3 or more of the organization’s total expenses in a year as reflected on the organization’s Internal Revenue Service Form 990, must disclose to the Commission the names of donors who donated $1,000 or more and also went on the trips. (SB 21 (Hill) - Chapter 757, Statutes 2015)